The main advantages infrastructure offers investors as an asset class – low correlation to equities, low volatility and inflation-linked protection – will continue to fuel investor appetite this year, according to 76 percent of financial advisers surveyed by UK-based infrastructure and private equity investment firm Foresight Group.
More than a third of the 200 wealth managers and financial intermediaries polled added Brexit uncertainty to the list of key drivers fuelling greater demand.
“Over six in 10 (62 percent) financial advisers are looking to increase their clients’ allocation to infrastructure over the next three years, a dramatic increase from 32 percent last year,” the firm said in a statement.
The increase in allocation is expected in both UK-focused and global infrastructure funds, Infrastructure Investor understands.
Asked whether the possibility of nationalisation of UK infrastructure assets weighed on investors’ minds, Foresight’s senior investment manager Mark Brennan, said: “Investors are aware of the political risks relating to some infrastructure assets. However, the likelihood of any wide-scale ‘nationalisation’ is generally regarded as low, even in the context of a Labour government.”
Headquartered in London, Foresight’s focus is predominantly in the UK. However, the firm also invests in infrastructure in Southern Europe and Australia, currently managing more than £2.2 billion ($2.8 billion; €2.5 billion) in infrastructure assets that include 80 operating solar plants across those three countries.
According to its website, it has also mobilised roughly £1 billion into the waste sector in the UK through 40 projects.